Babcock v. C. Tech Collections Inc. et al
Filing
33
ORDER granting (30) Motion for Preliminary Approval in case 1:14-cv-03124-MDG. Plaintiffs must file a motion for final approval of the settlement and any application by Class Counsel for attorneys' fees or reimbursement of expenses by November 10, 2015. The Court will hold a fairness hearing on November 17, 2014 at 11:00 a.m. at the United States District Court for the Eastern District of New York, 225 Cadman Plaza East, Brooklyn, NY, Courtroom 11C. Ordered by Magistrate Judge Marilyn D. Go on 7/24/2015. Associated Cases: 1:14-cv-03124-MDG, 2:14-cv-03576-MDG (Proujansky, Josh)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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JENNIFER BABCOCK, et al.,
PRELIMINARY APPROVAL
ORDER
Plaintiffs,
- against -
1:14-CV-3124 (MDG)
C. TECH COLLECTIONS, INC., a New York
Corporation, et al.,
Defendants.
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LINDA CAMPBELL-HICKS, et al.,
Plaintiffs,
- against -
2:14-CV-3576 (MDG)
C. TECH COLLECTIONS, INC.,
Defendant.
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GO, United States Magistrate Judge:
The above-entitled matter came before the Court on the
parties' Joint Motion for Preliminary Approval of the Class
Settlement Agreement (ct. doc. 30) and a hearing on the motion
held on July 23, 2015.
The parties then filed additional
documents, including a revised Settlement Agreement and Class
Notice (ct. docs. 32-1, 32-2), which at the Court's direction,
revised earlier filings (ct. docs. 31-1, 31-2).
After
consideration of the submissions and prior proceedings herein,
including settlement conferences held before the undersigned,
this Court grants the motion based on the following findings and
conclusions of law.
I.
Provisional Certification of the Proposed Rule 23 Settlement
Class
A.
The Court provisionally certifies the following class
under Fed. R. Civ. P. 23(e), for settlement purposes ("Settlement
Class") of those individuals who meet the following definition:
(1) All consumers to whom Defendants mailed a written
communication in connection with an attempt to collect
a debt, which included a statement that a "$3.00
convenience fee will be added for credit card
payments," regardless of whether such fee was paid or
not, during a period beginning May 19, 2013, and ending
June 9, 2014 ("Class #1"); and
(2) All consumers to whom Defendants mailed a written
communication in connection with an attempt to collect
a debt, which included a statement that a "$3.00
convenience fee will be added for credit card
payments," and who paid such a fee, during a period
beginning May 19, 2011, and ending June 9, 2014 ("Class
#2").
B.
The Court finds for purposes of the motion that
Plaintiffs meet all of the requirements for class certification
under Fed. R. Civ. P. 23(a) and (b)(3) as follows.
C.
Plaintiffs satisfy Fed. R. Civ. P. 23(a)(1) because
there are approximately 66,891 Class Members in Class #1 and
10,246 Class Members in Class #2.
impracticable.
Therefore, joinder is
See Consol. Rail. Corp. v. Town of Hyde Park, 47
F.3d 473, 483 (2d Cir. 1995).
D.
Plaintiffs satisfy Fed. R. Civ. P. 23(a)(2), the
commonality requirement, because Plaintiffs and the Class Members
share common issues of fact and law, including whether the
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boilerplate collection letters sent to them were false,
misleading and deceptive debt collection practices which violated
the Fair Debt Collection Practices Act ("FDCPA").
E.
Plaintiffs satisfy Fed. R. Civ. P. 23(a)(3), because
plaintiff's claims arise from the same factual and legal
circumstances that form the bases of the class members' claims.
See Prasker v. Asis Five Eight LLC, 2010 WL 476009, at *2
(S.D.N.Y. Jan. 6, 2010).
F.
Plaintiffs satisfy Fed. R. Civ. P. 23(a)(4) because
plaintiffs' interests are not antagonistic or at odds with class
members.
See Diaz v. Eastern Locating Servs., Inc., 2010 WL
2945556, at *2 (S.D.N.Y. July 22, 2010); Prasker, 2010 WL 476009,
at *2.
Plaintiffs Jennifer Babcock and Linda Campbell-Hicks are
therefore appointed as Settlement Class Representatives.
G.
Plaintiffs also satisfy Rule 23(b)(3).
Common factual
allegations that Defendants sent Class Members boilerplate
letters containing identical language and a common legal theory
predominate over any factual or legal variations among class
members.
See Diaz, 2010 WL 2945556, at *2; Prakser, 2010 WL
476009, at *2.
Class adjudication of this case is superior to
individual adjudication because it will conserve judicial
resources and is more efficient for class members, particularly
those who lack the resources to bring their claims individually.
See Diaz, 2010 WL 2945556, at *2.
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II.
Preliminary Approval of Settlement
A.
Based upon the Court's review of the parties' Joint
Motion for Preliminary Approval, the Declarations of Andrew T.
Thomasson, Abraham Kleinman, Brian L. Bromberg and Joseph Maruo,
and all other papers submitted in connection with Plaintiff's
Motion for Preliminary Approval, the Court grants preliminary
approval of the settlement memorialized in the Settlement
Agreement and Release, docketed as ct. doc. 32-1.
B.
Under the terms of the Settlement proposed, the
defendants will establish a fund totaling $90,726.00.
From the
total settlement fund, the named plaintiffs will each receive a
payment of $1,000.00 for their individual claims under the FDCPA,
plus an additional payment of up to $3,500.00 subject to court
approval for their service to the class members; plaintiff
Babcock will receive an additional $153.00 for her claims brought
under New York General Business Law ยง 349 for actual damages
sustained.
From the total settlement fund, $69,573.00 will be
made available for Class #2.
Each member of Class #2 who timely
submits a claim form will receive a check for the $3.00 fee each
paid to defendants.
Any unclaimed portion of the $69,573.00 fund
for Class #2 and any disallowed service award to the plaintiffs
will be added to the $12,000.00 fund for Class #1.
Each member
of Class #1 and each member of Class #2 who timely submits a
claim form is also entitled to a pro rata portion of the
$12,000.00, plus any unclaimed portion of the funds for Class #2
and any disallowed service award.
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To the extent that there are
any funds from un-cashed, expired settlement checks, those funds
will be paid over to a cy pres award to be distributed to the
National Consumer Law Center.
C.
For purposes of this motion, the Court concludes that
the Settlement proposed is within the range of possible,
reasonable settlements, such that notice to the Class is
appropriate.
See In re Traffic Exec. Ass'n, 627 F.2d 631, 634
(2d Cir. 1980).
However, as noted at the hearing, the Court is
concerned with the proposed "service payment" to the class
representatives.
The Court is not aware of any personal risk
incurred by plaintiffs on behalf of the class or a significant
expenditure of time and effort expended by plaintiffs in
prosecuting the case, which would justify such a disproportionate
award compared to the class members.
See Torres v. Toback,
Bernstein & Weiss, LLP, 2014 WL 1330957, at *3 (E.D.N.Y. 2014)
(expressing concern over "disproportionate" award of $8,500
compared to class member receiving $60 each).
As reflected in
the revised Settlement Agreement and Class Notice, the Court will
determine the amount of an appropriate service award at the
Fairness Hearing.
D.
The Court finds from personal observations at numerous
settlement conferences with the parties that the Settlement
Agreement was reached after extensive, arm's length negotiations
by counsel experienced in consumer class actions and is not the
product of collusive efforts.
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III.
Appointment of Plaintiffs' Counsel as Class Counsel
A.
The Court appoints Andrew T. Thomasson, Abraham
Kleinman, Brian L. Bromberg and Joseph Maruo as Class Counsel
because they meet the requirements of Federal Rule of Civil
Procedure 23(g).
See Damassia v. Duane Reade, Inc., 250 F.R.D.
152, 165 (S.D.N.Y. 2008).
B.
Class Counsel spent significant time and did substantial
work identifying, investigating, and settling Plaintiffs' and the
Class Members' claims.
C.
Class Counsel has substantial experience litigating
consumer class actions.
D.
The work that Class Counsel has performed both in
litigating and settling this case demonstrates their commitment
to the Class and to representing the Class' interests.
IV.
Class Notice
A.
The Court approves the Revised Proposed Class Notice
which is filed as ct. doc. 32-2 and directs its distribution to
the Class, subject to the following modification.
Under Question
6, the second paragraph should provide as follows:
Class #1: Out of the Settlement Fund $12,000 shall be
immediately designated to be distributed pro rata to
any class members who received C. Tech's collection
letter, regardless of whether the "$3.00 convenience
fee" requested in the letter was paid or not
("Statutory Damage Fund"). This amount may be
increased by the funds described below.
B.
Pursuant to Rule 23(c)(2)(B), a notice must provide
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the best notice practicable under the circumstances, including
individual notice to all members who can be identified through
reasonable effort.
The notice must concisely and clearly state
in plain, easily understood language: (i) the nature of the
action; (ii) the definition of the class certified; (iii) the
class claims, issues, or defenses; (iv) that a class member may
enter an appearance through counsel if the member so desires; (v)
that the court will exclude from the class any member who
requests exclusion; (vi) the time and manner for requesting
exclusion; and (vii) the binding effect of a class judgment on
class members under Rule 23(c)(3).
C.
The Notice satisfies each of these requirements and
adequately puts class members on notice of the proposed
settlement.
See In re Michael Milken & Assocs. Sec. Litig., 150
F.R.D. 57, 60 (S.D.N.Y. 1993).
The Notice of Settlement
describes the terms of the settlement, informs the Class about
attorneys' fees, and provides specific information regarding the
date, time, and place of the final approval hearing.
D.
The Court finds that the first class mailing of the
proposed form of Settlement Class Notice in the manner set forth
herein, and in the Settlement Agreement, is the best notice
practicable under the circumstances, consistent with due process
of law, and constitutes due and sufficient notice of this Order
to all persons entitled thereto and is in full compliance with
the requirements of Fed. R. Civ. P. 23.
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V.
Class Action Settlement Procedure
A.
The Court hereby sets the following settlement
procedure:
1.
Defendants must provide the Claims Administrator
selected by the parties, in electronic form, with the names,
social security numbers and last known addresses of all Class
Members within 10 days of this Order;
2.
Class Counsel must mail, via first class mail,
postage prepaid, the Class Notice to Class Members using the last
known address as recorded in Defendant's records by August 20,
2015;
3.
Class Members will have until October 20, 2015 to
submit claim forms, request exclusion or object to the
settlement.
All Eligible Individuals who sign and return a claim
form by October 20, 2015 shall be included in the Settlement
Class and shall be bound by the terms of the Settlement Agreement
and the Judgment and all Orders entered by the Court in
connection with the Settlement, whether favorable or unfavorable
to the Class.
All Eligible Individuals who do not timely return
a signed claim form shall not be entitled to any of the relief
described in the Settlement Agreement but are bound by the terms
of the Settlement Agreement.
All Eligible Individuals who
request exclusion from the Settlement will not be bound by the
terms of the Settlement and will not be entitled to its benefits.
Only Settlement Class members can formally object to the terms of
the settlement.
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4.
Plaintiffs must file a motion for final approval of
the settlement and any application by Class Counsel for
attorneys' fees or reimbursement of expenses by November 10,
2015.
Such submissions shall include a discussion of the
Grinnell factors, including the substantive fairness of the
settlement and adequacy of counsel to represent the plaintiff
class.
See City of Detriot v. Grinnell Corp., 495 F.2d 448, 463
(2d Cir. 1974).
The Motion must also include a list of the names
and addresses of the Class Members who have filed claim forms and
objectors, together with any response Plaintiffs have received
from the objectors;
5.
The Court will hold a fairness hearing on November
17, 2014 at 11:00 a.m. at the United States District Court for
the Eastern District of New York, 225 Cadman Plaza East,
Brooklyn, NY, Courtroom 11C.
Dated:
Brooklyn, New York
July 24, 2015
/s/
MARILYN DOLAN GO
UNITED STATES MAGISTRATE JUDGE
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